Business line of credit rates and fees at banks, credit unions and online lenders are built in different ways, so a quoted rate tells you very little about what a $100,000 line will cost. Banks and credit unions usually price a line as a margin over the prime rate, SBA lines carry federal rate ceilings, and many online lenders charge per draw. This guide compares the four options on cost, speed, paperwork and limits as of October 6, 2026, and then shows which one suits which kind of business.
How business line of credit rates and fees compare at banks, credit unions and online lenders
The table compares a $100,000 business line of credit across the four main sources. Where a cell says it varies, the answer depends on the lender's own policy, because no rule sets it.
| Bank | Credit union | SBA line (through a participating lender) | Online lender | |
|---|---|---|---|---|
| Pricing structure | Prime plus a margin, usually variable | Prime plus a margin, usually variable | Negotiated, subject to SBA maximums | Often a fee or rate per draw; some quote an APR |
| Approval speed | Three in four banks can approve a small, simple loan within five business days (FDIC) | Varies; process often resembles a small bank's | Lender's process plus SBA steps | Often faster; varies by lender |
| Documentation | Tax returns, financial statements, bank statements, personal financial statement | Similar to banks, plus membership | Lender's package plus SBA Form 1919 | Often bank statements and basic business details |
| Limit at $100,000 | Within range at most banks | Small credit unions may hit one-borrower limits | SBA Express goes up to $500,000 | Some start lower and raise the limit over time |
| Common fees | Annual or renewal fee; sometimes an unused-line fee | Similar to banks | SBA upfront guaranty fee (can be passed to you) plus lender fees | Draw fees, origination fees, sometimes maintenance fees |
The speed figures come from the FDIC's 2024 Small Business Lending Survey report (published 2024, based on a 2022 survey). It found that three in four banks approve their typical small business loan within 10 business days. Banks also told the FDIC that a past loan relationship speeds up approval, which helps if you already bank there.
Approval odds differ more by your own profile than by lender type. The Federal Reserve's 2025 summary of Small Business Credit Survey data (2023 data, published March 2025) shows small banks approving 75% of applicants for at least some financing, credit unions 76%, online lenders 70% and large banks 66%. The same summary found that online lenders received the lowest satisfaction scores of any lender type.
Prime-based pricing and draw-based pricing work differently
A prime-based line charges interest only on the balance you've drawn, at a rate equal to the prime rate plus a margin set by your credit profile. If prime moves, your rate moves with it. You usually pay interest monthly during the draw period, and you repay principal when cash comes in. The fixed costs are things like an annual or renewal fee, and some banks also charge a fee on the unused part of the line.
A draw-based line treats each draw almost like a small loan. Every time you pull funds, the lender charges a set fee or rate on that draw, and you repay it on a fixed schedule, often weekly or monthly over a few months. Paying early may or may not lower the charge, depending on the contract. Because the fee is quoted as a flat percentage of the draw, it's hard to compare against an annual interest rate.
Federal Reserve Governor Barr described this in a March 2025 speech. Research he cited found a lender website advertising a "factor rate of 1.15" that translated to an estimated APR of about 70%. Our guide to factor rate vs APR covers that conversion in detail.
A worked example: one $40,000 draw priced three ways
Take a business with an approved $100,000 line. It draws $40,000 to cover a seasonal inventory buy and repays it in 12 equal weekly payments of about $3,333. Over those 84 days the average balance is roughly $21,667. The bank margin and the online fee below are illustrative assumptions chosen to show the mechanics. They aren't quotes.
| Structure | Assumed pricing | Cost of this draw | Approximate annualized rate |
|---|---|---|---|
| Bank or credit union, prime-based | Prime 7.00% + 2.50% = 9.50% | About $474 in interest | 9.50% plus any line fees |
| SBA line at the ceiling | Prime 7.00% + 6.0% = 13.00% | About $648 in interest | 13.00% plus fees |
| Online, draw-based | 4% of the draw | $1,600 | Roughly 32% |
The interest math for the bank row is $21,667 × 9.50% × 84/365, which comes to about $474. For the online row, $1,600 divided by the $21,667 average balance is about 7.4% for 84 days, or roughly 32% a year. Add a hypothetical $500 annual fee to the bank line and this single draw still costs about $974, well under the $1,600 draw fee. Fixed annual fees weigh more heavily when you rarely draw, so run this math using your own expected usage. Our guide on how big a business line of credit should be can help you size it.
▦Estimate your lines of credit paymentsRun the numbers in the lines of credit estimator →▸What an SBA line of credit adds, and what it costs
SBA lines come from participating banks, credit unions and other lenders, with SBA guaranteeing part of the balance. SBA's types of 7(a) loans page (checked October 2026) says that under the standard 7(a) product, revolving lines are "permitted only under SBA Express, Export Express, or CAPLines." For SBA Express it lists a maximum loan amount of $500,000, a 50% guarantee, revolving lines of up to 10 years and a credit decision made by the lender. Lenders aren't required to take collateral for Express loans up to $50,000. Above that they may use their existing collateral policy, but a loan isn't to be declined solely for inadequate collateral. SBA's 7(a) loans page also describes the 7(a) Working Capital Pilot for lines up to $5 million with a maximum maturity of 60 months.
Rate ceilings are set in 13 CFR 120.214 (eCFR, current as of October 2026). For variable-rate 7(a) loans of more than $50,000 and up to $250,000, the rate can't exceed the base rate plus 6.0 percentage points. Loans of $50,000 or less are capped at base plus 6.5 points. The initial maximum is set as of the date SBA receives the application. With prime at 7.00%, a $100,000 SBA line priced off prime can't start above 13.00%, though lenders can and do negotiate lower.
On fees, SBA says lenders pay an upfront guaranty fee on each 7(a) loan and are allowed to pass that cost on to you. The lender's annual service fee can't be charged to the borrower. SBA's FY 2027 7(a) program fees notice took effect on October 1, 2026. Ask your lender for the exact upfront fee on your line under that notice. Don't rely on last year's fee tables. For more on the program, see our SBA loans page.
Is there an average small business line of credit rate right now?
No official source publishes one average rate covering banks, credit unions and online lenders, and any single figure you see online mixes very different products. Three published data points are more useful. Prime was 7.00% at the start of October 2026. SBA's ceiling for a $100,000 variable line is base plus 6.0 points. The Federal Reserve's latest July 2026 Senior Loan Officer Opinion Survey found that modest net shares of banks had eased the costs of credit lines to small firms (annual sales under $50 million).
Your margin over prime depends on how lenders assess your credit, cash flow, time in business and collateral, so approval and terms vary by lender. Our business loan interest rates guide explains which factors move that margin.
Which lender type fits your business
Rankings of the best lenders for 2026 sort companies by brand. A better way to choose is to start from your own profile. Use this table as a starting point.
| Your situation | Usually the best fit | Why |
|---|---|---|
| Two or more years in business, solid financials, existing banking relationship | Bank | Lowest margins over prime; relationship can speed approval |
| Member of a credit union, need is moderate | Credit union | Pricing similar to banks; check the lending limit first |
| Thin collateral but steady cash flow, can wait a few weeks | SBA Express line (or a 7(a) WCP line if you have 12+ months of history and receivables or inventory to borrow against) | Capped rates; under Express, inadequate collateral alone isn't grounds to decline |
| Need funds fast, newer business or uneven credit | Online lender | Faster process and wider criteria, at a higher cost per draw |
| One-time purchase you'll repay over years | Business term loans | Fixed payments usually beat revolving debt for long uses |
Credit unions need one extra check. Under NCUA's 12 CFR Part 723 (eCFR, current as of October 2026), a federally insured credit union's commercial loans to one borrower generally may not exceed the greater of 15% of its net worth or $100,000. Some extra room is allowed if the excess is fully secured by readily marketable collateral. A small credit union may therefore be close to its limit on a $100,000 line, so ask early.
Documents and contract terms to check before you sign
Have these ready before you apply so lenders can make offers you can compare. The business loan documents checklist covers each one in more depth.
- Business tax returns, usually two years for banks and SBA lenders
- Year-to-date profit and loss statement and balance sheet
- Three to six months of business bank statements (often all an online lender asks for)
- Personal financial statement and personal tax returns for owners
- Debt schedule listing current loans and lines
- Entity documents, EIN and business license
When offers come in, check these terms in the contract:
- Rate basis: prime plus what margin, and whether there's a rate floor.
- Draw cost: any per-draw fee and the repayment schedule attached to each draw.
- Standing fees: annual, renewal, unused-line, maintenance or inactivity fees.
- Collateral and guarantees: blanket liens and whether a personal guarantee is required.
- Renewal and review: how often the lender reviews the line and whether it can freeze or reduce it.
If you're in Canada, lines are also commonly priced off each lender's own prime rate. Our Canada small business loans guide covers the local options. Wherever you are, EQ Funding routes one application to lenders who compete for your business, so you can line up bank, SBA and online offers on the same terms. EQ doesn't lend; the lenders on our network make every credit decision.